Insurance group Hardy estimates major hit from Japan quake

Wednesday 6 April 2011 07:53 BST

Destruction: rescue workers observe a minutes silence amid the debris left in the wake of the devastating earthquake

Insurance group Hardy today estimated it would take a hit of up to £12 million from the Japanese earthquake, and said there were signs that the quake and other disasters were pushing up insurance prices.

Hardy expects a loss of between £9 million and £12 million from the March 11 quake, it said on Wednesday.

The initial estimate is based on a total loss to the insurance industry of $35 billion.

Hardy, which last year fended off a takeover attempt by rival Beazley, said the Japanese quake and other natural catastrophes since the beginning of 2010 had had "a positive impact on the rating environment generally."

Lloyd's of London rivals Hiscox and Amlin have also said earthquakes and floods over the past 16 months could underpin global insurance prices, which have been flat or falling for most of the last four years due to intense competition.

However, some analysts are sceptical that losses from the Japanese quake will be big enough to trigger a lasting improvement in prices outside Japan and the Asia-Pacific region.

Big natural disasters can push up insurance prices as a welter of claims eats into insurers' capital, forcing less well-funded players to retrench and freeing those still in the market to charge more.